Correlation Between Panda Financial and Shenyang Chemical
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By analyzing existing cross correlation between Panda Financial Holding and Shenyang Chemical Industry, you can compare the effects of market volatilities on Panda Financial and Shenyang Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Panda Financial with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Financial and Shenyang Chemical.
Diversification Opportunities for Panda Financial and Shenyang Chemical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Panda and Shenyang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Panda Financial Holding and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Panda Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Panda Financial Holding are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Panda Financial i.e., Panda Financial and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Panda Financial and Shenyang Chemical
Assuming the 90 days trading horizon Panda Financial Holding is expected to under-perform the Shenyang Chemical. In addition to that, Panda Financial is 1.27 times more volatile than Shenyang Chemical Industry. It trades about -0.44 of its total potential returns per unit of risk. Shenyang Chemical Industry is currently generating about 0.01 per unit of volatility. If you would invest 327.00 in Shenyang Chemical Industry on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Shenyang Chemical Industry or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Financial Holding vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Panda Financial Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenyang Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Panda Financial and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Financial and Shenyang Chemical
The main advantage of trading using opposite Panda Financial and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Financial position performs unexpectedly, Shenyang Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.The idea behind Panda Financial Holding and Shenyang Chemical Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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